A strategic alignment means whether all components of organization are aligned with its long term purpose and objective! Organization has to evaluate their position from multiple strategic aspects; if we talk about current situation, understanding and evaluating strategic aspects becomes more critical due to COVID-19 for all industries since entire eco system has been affected. COVID-19 has really push organization aggressively to think on their core capability and strategies. Almost all industry has been affected due to COVID-19, let’s take three industries as an example, and understand how they can work towards strategic alignment to survive and/or to stand out in this period
Event Management – Due to precautionary measurement such as social distancing and gathering of people, event management industry is facing huge and unprecedented impact in terms of postponing or cancellation of local, national and global events overnight and it still continues to do so. The impacts are
60 Million people are affected (Directly Or In Directly)
In first two months of Lock down – Industry has faced more than 3,000 Crore of loss
Hospitality – Due to travel restrictions, postponing or cancellation of travel plans, hospitality is also facing tremendous pressure in terms of even getting the foot fall. Following are impacts on hotel industry
60% of Hotel operator (From survey) has mentioned that it will take minimum 24 months to reach back to the 2019 revenue level
According to Federation of Associations in Indian Tourism and Hospitality (FAITH), around 70% of total workforce will be affected (Directly Or indirectly) i.e. 3.8 Crores
Banking Industry – Doing banking is not “want” but rather necessity, if we compare banking industry with event and hospitality which is highly affected, banking is also affected at certain degree, as lock down imposes, it was difficult to access branches for regulatory operations, reduction in domestic and cross border trade, in ability to access data / infrastructure, and default in loan payments. This affects in achieving desire objective and goals.
In business environment understanding and working towards strategic alignment plays critical role in defining and achieving organizations purpose. Strategic alignment is nothing but how organization organizes its efforts, actions plans (Strategies), to achieve its long term purpose. As a fundamental, organization purpose normally doesn’t change, strategies and organization structures do. Organization purpose is answer of “What” company wants to achieve, and strategies which organization formulates answers “How” they are going to achieve what they have aim.
In order to understand whether organization strategy are aligned – Organization can start by asking two questions to themselves and rationally understand in simple method
- How well our business strategies support the fulfilment of our company’s purpose?
- How well our organizations support the achievement of business strategy?
In this simple method, organization has to rate from scale 1 to 10 for their each strategic component against this question and dig down their strategies. The higher the rank, the higher the chances that strategies are align rationally. This is perhaps the easiest method to evaluate whether organization strategies are aligned.
In addition to simpler method, organization can take more structure approach towards their strategic alignment; organization can use Balanced Scorecard framework from Dr. Kaplan, and Dr. Norton and really validate strategic alignment. Figure 1 represents balanced scorecard framework.
In this method, organization has to identify objective against each of the parameter in respective perspective and post that organization has to evaluate their strategy and see whether strategies which they have identified is fulfilling decided objective and goals. Above framework can be applicable, regardless of which industry organization belongs. Core strategic elements remain the same however the weight age of strategic elements differs from industry to industry.
Event Management Organization & Strategic Alignment
The sole purpose of organization in event industry is to help event sponsors to manage their event for respective scope. While keeping the purpose in mind, organization has to think on how they can deliver the purpose to their client. In this COVID-19 it is challenging for companies to think beyond conventional event management practices /product and services however as no two events are same, their approach towards event designing, planning, execution, team structure gets change, similar way organization has to align their strategy to meet the overall purpose of the organization.
Due to the nature of COVID-19 – Safety procedure has to follow which include social distancing, personal hygiene and many more. This has already impacted postponing or cancelling of local, national and global events however in order to sustain and grow entities such as corporate, and government cannot wait their actions or projects to be on stand still mode, if we talk about corporate then annual meeting with shareholder must be done on time, launching of any product or service must be done in order to gain that advantage, if we talk about government, then launching of projects, communicating with different government entities, must be carry out to move the economy value chain.
In below shown figure, we have taken strategic components “Availability” and “Services” from customer perspective in BMC model and trying to identify what skill do we need.
*Manage – From inception to post execution i.e. (Designing, Production, Execution and closure of event)
Creating, designing, and managing virtual and hybrid events require different set of tools, skills, attitude, and manpower to really help achieving its objective. Event management can really align their strategy towards possible above trends to ultimately achieve their purpose. There can be many more possibilities / trends, which can come as we learn and adapt new environment but one thing is mandatory for organization that they needs to be more and more vigilant, resilience and align their strategies towards long term purpose of organization more frequently.
Hospitality & Strategic Alignment
Other industry which is highly impacted is hospitality; all travel purpose may it be leisure, heritage, adventure, or MICE has been affected due to COVID-19. In these tough times, though it will take long time to recover, organization has to rethink constantly regards to what it will take to full fill the purpose and objective of organization. Following are possibly influencing factors for consumer when it comes to choosing right service provider.
According to us, above three elements plays critical role for target consumer to choose particular brand for their hospitality needs. Hospitality cannot encourage consumer to spend same amount of money they used to spend previously, however whenever consumer decide to spend, organization has to understand above three elements and how they incorporate the same which helps them achieve objective and purpose.
According to survey conducted by Mckinsey for user preferences among number of possibility, following comes as a top 3 consumer preferences
– More intense cleaning (UV Light disinfection)
– Conduct COVID-19 Rapid tests for every guest at check In (In case of hotels)
– Additional cleaning downtime between stays Or visits
Consumer need convenience, peace while they are utilizing the services, if they are satisfy with the service which they receive there are chances that they will reuse the services however in order to be confident enough that consumer can come back, organization can really work on loyalty benefit which does not only encourage consumer to use service again but also plays critical role in sustainability Or growth of organization.
Customer Journey experience
Organization has to re wire their capability in terms of how they are making customer journey more cheerful, joyful and safe at the same time. Some of the aspect organization can work on
Usage of technology
– Touch less experience – From booking, check Ins and Check Outs, ordering of food etc
– Cloud & machine learning AI – To understand behaviour and align offerings / promotions accordingly
Create value experience – Something that may lead loyalty to brand
– Flexibility in terms of services – For example, A hotel does not restrict OR rigid in their traditional check In and check out timings.
Banking Sector & Strategic Alignment
Banking is perhaps amongst very few industries which is facing tremendous pressure for achieving growth and provide better and better customer experience not only Post COVID-19 but since Fintech started evolving into horizon few years back. Banking sector plays critical role in Indian economy; it contributes 7.7% of Indian GDP and employs more than 1.5 million people in the country. With this huge number, banks today are facing stiff competition from their competitor and at the same time new edged start-ups and fintech companies.
In this cut throat competition, banks have to think for long term strategic advantage rather than short term profit. As part of strategy, banking sector has to take plain white paper and pen, to really draft what do their customer desire, OR how do they fulfil OR provide service of core banking offerings. This becomes part of their strategy alignment, and this can be done with the help of strategic framework balanced scorecard as mention in figure 1. Reason for doing white paper and pen exercise because no one visualized about fintech, even Technology Company did not realize till the time they understood their technology capability but all this could be achieved only with the help of standard process of thinking on strategic components.
Possible future critical strategic factor
One strategic aspect which has been considered by almost all banks is digitization or technology, however relying only on technology can also have its adverse effect. Banks has to consider financial technology as a facilitator and not only emphasise on that. Sooner financial technology will become commodity, anyone can have it however as part of strategic alignment and better future, bank really has to emphasise on long term vision and ability to execute needed change for new landscape. Banks has to think for next decade and not only quarter or next year, short terms profit thinking will not help becoming scalable and future leader.
Banks can start asking few questions to them for strategic alignment
– How innovation can help banks?
– Next decade competitive structure of industry – How does it look?
– Incumbent position – Stronger OR Weaker?
– What really do we need to do now for decade end result?
Banks has to consider structure framework through which strategies has to be verify against purpose and goals. For structure approach, Bank can refer framework mentioned in BMC model figure and carry out an important activity.
Critical factor in digital adaptation
According to us, there are certain factors which are going to shape future of banking sectors or will have lasting impact. Below mentioned figure shows factors affecting banking sector for long terms.
Time to time, we have been emphasising to organization that companies has to put customer experience at heart to evaluate and decide their product, services, strategies, without which everything may go haywire.
Traditional banking system has core capabilities in terms of knowing banking product, services, transaction and necessary infrastructure to manage all formalities and compliances, this can be merge with technology solution provider Company to create a competitive edge, for example Apple Card with Goldman Sachs – Where Apple Card is a credit card created by apple but issued by Goldman Sachs. Apple has register 3.1 Millions card users within short time frame which is huge for any new company to acquire this many users. Digital transformation will play role between being in the business versus not being in the business in banking sector. For an instance, Amazon who has huge database of users, with capability in development, execution and management of technology application with no physical branch cost which generally accounts for 40% of an average bank’s cost, looks promising for their success if they tie up with bank.
Block Chain Technology
In digitizing business, one of the key factors which will play significant role is Block Chain Technology. According to Accenture, the world banking sector will save up to $20 Billion by 2022 by implementing block chain. Banks such as Kotak Mahindra, Axis bank and Yes bank has already partnered with global block chain firm named “Ripple” to provide spontaneous cross border remittance.
Artificial intelligence will also play crucial role, in AI, cognitive analysis is a new fundamental criterion towards information discovery and decision making. Cognitive analysis is inspired by how human brain processes information and draw conclusions. Artificial intelligence can help banking sector in various way, some of them are
– Fraud & risk management
– Digitization and automation of banking process
– Face recognition at ATMs
Ever changing society and relationship pattern
Every day consumer preferences are upgraded, there patterns in terms of how they wish or aim to interact with banking services changes, this means evolving towards a more well-organized, and productive distribution model of banking services will matter. Technology, digitization will play critical role in balancing and delivering services to consumer but at the end how bank adopt strategy to create long lasting value to customer – Wins
All above possibilities are nothing but part of organization strategic components as mention in Balanced scorecard framework in figure 1. Travel will return, events will return, banking with new horizon will return, it may take longer, but it will return. What’s certain is that the next normal will be marked by structural shifts, and how organization plans each of their strategic components and aligning it while keeping consumer in centre will define success.
Saurin Parikh, who has done Masters in International Business and Management Information System from Texas, is also a Certified Business Analyst. He started as a business analyst with Jagdish Hirani & Associated, is currently leading the core operations of transformation projects. He has wide experience in industries like home furnishing, diamond, tourism, food sectors etc. He is Observant, Conscious about facts, Patient, Positive, gives attention to detail and believes in total Completeness.
Success Mantra – “You have to touch ground (foundation) to make perfect organizations. Right methods with consistent approach are bound to yield results”
©J.hirani, Strategic Alignment in Event Management, Hospitality & Banking Sector, September 2020. All rights reserved.